B.C. Supreme Court approves acquisition of Great Canadian Gaming casino giant.
For more than a month, a group funding affiliate of the investment firm Apollo Global Management has been eyeing up the largest casino gaming, entertainment and hospitality company in all of Canada. On New Years Eve, the firm got the news it’s been waiting so long to hear.
The Supreme Court of British Columbia issued a ruling in favor of Apollo’s acquisition of Great Canadian Gaming Corp. No doubt, the shareholders of both companies had a fabulous night ringing in the new year.
Court Approves Acquisition of Great Canadian Gaming Casino Giant
News came down the wire yesterday that Apollo had been given the green light to acquire GCG. Under the terms of the acquisition, the takeover will see Apollo dishing up $45 per share for Canada’s largest casino gaming corporation. Based on the latest filing of 55.03 million shares outstanding, that puts the total price tag at around $2.48 billion (US $1.7bn).
That 10-figure price tag won’t even dent the firm’s spending limits. According to Apollo’s Q3 earning report, ending September 30, 2020, the investment group and its affiliates funding arms currently oversee $433 billion worth of assets.
This isn’t their first foray into gambling entertainment, either. The private equity firm acquired part ownership of Harrah’s Entertainment in the mid-2000s, of which it still owns 30% today. The same Apollo affiliate that’s taking over GCG also purchased a significant 48.67% stake in the Italian gaming corporation, Gamenet Group, in October 2019.
Alex va Hoek, a partner at Apollo Global Management, described his firm as having “considerable experience in the gaming space.” He believes it’s that very experience that will become a catalyst for Great Canadian, helping to “accelerate future growth and innovation as the market leader in Canada.”
15% Sweetening of the Pot Attracts 79% Favor
When Apollo made its original bid for GCG, shareholders scoffed. Then on December 21, the private equity firm upped the ante by 15%. The new $45 per share offer represented the value of GCG stocks in February 2020, before casinos were shut down across the country.
Among shareholders, grumbling turned to quiet murmurs as they considered the offer. Before the day’s end, half of GCG’s major investors were in favorable agreement. Two days later, 79% of shareholders voted to accept the deal.
GCG Acquisition the Deal of the Decade?
GCG shareholders were delighted by the investment firm’s offer, returning the vast wealth they’d been steadily losing over the last nine months. Suffice it to say, they were happy to be rid of the tumultuous stock, leaving more than enough bills in their pockets to move on. But some analysts believe Apollo won the deal of the decade.
In February 2020, Great Canadian shares [TSX: GC-TO] reached a peak value of $44.89. By late March, they were cut by more than half, falling as low as $19.09. Things had improved slightly by early November, rising to around $24, but it wasn’t until M&A talks got serious that CGC’s value began looking up. On December 21, when Apollo’s affiliate hiked the offer to $45 per share, GC-TO rose from $37.24 to over $43, and has held steady since.
Canada is expected to reopen its casinos in 2021. Analysts are practically drooling over the potential value of the Great Canadian Gaming casino giant when that time comes. Great Canadian currently operates 26 gambling entertainment properties in British Columbia, New Brunswick, Nova Scotia and Ontario.
